LAST May 8, the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), based at Los Banos, Laguna, held a forum on how to "effectively respond to the triple shocks impacting the Philippine agriculture sector."
Basically, it was the same issues that I wrote about in an earlier column titled "Triple Threat."
The triple shocks referred to are skyrocketing fuel costs, rising fertilizer prices, and the strong El Niño predicted to hit the country the second half of this year that can last till early next year.
The SEARCA forum was convened by its director, Dr. Merceditas Sombillla, who acknowledged the importance of conducting a top-level discussion on the triple threats with the aim of formulating suggestions on how the country should prepare to better respond to challenges.
The forum was attended by the "who's who" in the field of agriculture and agricultural economics. Among them were Dr. Emil Javier, National Scientist and former UP president and UPLB chancellor; UPLB Chancellor Edgardo Camacho; former Socioeconomic secretary Cielito Habito; former International Rice Research Institute (IRRI) deputy director and member of the Monetary Board Bruce Tolentino; Acting Development Academy of the Philippines (DAP) President Leocadio Sebastian; Department of Agriculture (DA) Assistant Secretary for Operations U-Nichols Manalo; IRRI Senior Scientist Alisher Mirzabaev; Philippine Rice Research Institute (PhilRice) Director John de Leon; UPLB Biotech Director Fides Tambalo; and representatives from the Bureau of Animal Industry, Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa), National Irrigation Administration (NIA), among others.
Mirzabaev predicted that a number countries in Southeast Asia region will be affected by the strong El Niño, including the Philippines. Rice-exporting countries such as Vietnam, India and Thailand will not be spared and hence, their rice harvest might experience a significant decline. This, in turn, will constrain their rice exports.
The Philippines, which will similarly experience a rice yield decline, will have to deal with uncertainties in the global rice market.
Mirzabaev, however, said that the global rice market has huge rice surpluses, thanks to record harvest in India. In fact, despite the Middle East war, global rice prices remain low.
Impact to vary region-to-region
For its part, Pagasa said that a strong El Niño will hit the country but its impact will vary from region to region. Thus, it is important that in planning the production of palay (unmilled rice) and other crops, areas that will still be blessed with ample rain and areas that will suffer from prolonged dry spell should be identified and mapped accordingly, and appropriate steps are taken.
The presentation of PhilRice also emphasized the varying impacts of the strong El Niño in various areas in the country. Based on previous data on El Niño occurrences within a timeframe of two decades, declines in harvest were palpable in certain areas of the country hit hard by the prolonged dry period.
The Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development (PCAARRD) under the Department of Science and Technology (DOST) and the Bureau of Animal Industry and other agencies participating in the forum presented a number of their technology initiatives that can cushion the adverse impacts of the El Niño.
It is obvious from their discussions that we are not lacking in knowledge and technologies on how to respond to the threat of this impending strong El Niño.
Habito noted this point by stressing that the problem in the country, particularly the agriculture sector, is institutional. Specifically, institutions are weak in implementing much-needed reforms to promote real economic development, extending to their ability to respond to crisis situations like the triple shocks the country is currently facing.
For my part, I observed that most of the presentation made in the forum offered medium- and long-term solutions to the challenges the country's agriculture sector is facing. So, there was no immediate solutions put forward to the triple shocks of rising fertilizer and fuel costs, and the strong El Niño.
In his summary at the end of the forum, Javier stressed the need to bring the action down to the local level, where plans and responses must be provided by local communities, particularly in responding to the El Nino threat. He further emphasized the need for the national leadership to conduct a series of consultations with key stakeholders in select regions of the country, where a plan for ensuring national food security will be unveiled in the face of these triple shocks.
Reactions from the participants should be solicited to strengthen the plan, and be inputted to the variety of responses in the final plan, which should be based on the unique characteristics of the different regions.
The SEARCA forum should serve as an initial step toward the direction set by Javier.
As for the suggested immediate responses to the triple shocks, there are three realities that must be taken into consideration to avoid aggravating the problem of a possible rice supply shortfall.
One is that any government action should avoid creating panic among the consumers. Panic buying by consumers to stockpile rice will result in higher rice prices, and this can result in a surge in demand that can lead to an artificial shortage.
Measures like price cap and rice import ban will do more damage than alleviate the situation. Our experience in the imposition of the price cap in September 2023 resulted in the dramatic rise of rice prices during that time. Similarly, the import ban last year alienated Vietnamese exporters, our main source of rice imports, making them reduce the volume of rice exports intended for the Philippines. Also, the Philippines lost revenues from the rice tariff proceeds.
Two, ramping up procurement of rice from local sources to temporarily prop up palay prices will only result in higher rice prices. Since local supply cannot meet total demand, sourcing more government stocks from local producers will inevitably lead to skyrocketing rice prices. What is needed is to increase total rice supply and this cannot be achieved without resorting to importation.
And three, the global rice market is stable and prices are low right now. So, it is the best time to procure the grain and stockpile them to fend off future supply crisis. Once El Niño strikes rice-exporting countries, together with the elevated costs of fertilizer and fuel, it is just a matter of time before rice prices significantly increase.
If the situation further deteriorates, rice exporting countries might even enforce a rice export ban to ensure their food security first.
The future situation is indeed dire. We need a better and determined leadership if we are to weather the triple shocks threatening the country's agriculture sector.